China sanctions Lithuanian banks in retaliation for 18th Sanctions Package measures

China’s Ministry of Commerce (‘MOFCOM’) has sanctioned Lithuanian banks UAB Urbo Bank and AB Mano Bank, prohibiting Chinese individuals and entities from transacting with them.  

Mofcom said it was responding to recent actions by the European Union to add two Chinese banks to its sanctions list for their alleged involvement with Russia. 

In its 18th sanctions package against Russia, the EU Council of Foreign Affairs added Heihe Rural Commercial Bank and Heilongjiang Suifenhe Rural Commercial Bank to its sanctions list, alleging they were providing crypto assets services to Russia. The designations came into force on 9 August. 

The EU move to sanction the two Chinese banks on 18 July, said MOFCOM, violated international law and would negatively affect Chinese-EU relations.

Marius Arlauskas, head of administration at Urbo Bank, said the bank had immediately contacted the Lithuanian central bank and the Lithuanian Ministry of Foreign Affairs (‘MFA’) upon hearing of the designation. 

Arlauskas said his bank had no financial dealings or business ties with individuals or entities in China, and the designation would have no impact on its operations or compliance operations. He added that the volume of transfers made by the bank’s clients to Chinese financial institutions represented ‘only an insignificant share’ of total transactions.

Mano Bank’s Chief Executive Giedrė Blazgienė said the bank had received no prior warning it would be sanctioned by China and had reached out to the Lithuanian Ministry of Foreign Affairs and the nation’s central bank for more information. She added that the bank doesn’t operate in China and the move by Mofcom wouldn’t affect Mano Bank’s operations, customers or services.